The exocrine (acinar/ductal) compartment of the pancreas has been hypothesized to harbor progenitor cells with the ability to give rise to new b-cells. The activation of such progenitors may potentially result in new b-cell formation through differentiation, rather than reprogramming. We hypothesized that, if pancreatic progenitors existed, they would respond to bone morphogenetic protein 7 (BMP-7), a TGF-b family member with dual TGF-b inhibition and BMP stimulation abilities. This hypothesis was premised on the widely reported link between these two concerted actions and expansion of progenitor pools in multiple tissues. Our University of Miami/Diabetes Research Institute (UM/DRI) partners have now reported that BMP-7 mediates the in vitro conversion of human non-endocrine pancreatic tissue into endocrine cells that are functional both in vitro and in vivo. This process entails the activation of progenitor-like cells that co-express PDX1 and ALK3, a BMP-7 receptor. Furthermore, we have confirmed that: (1) THR-123 (an ALK3 agonist cyclic peptide with BMP-7-like activity) can induce the same effect; and (2) ALK3+/Pdx1+ cells are also present in the mouse pancreas, which affords us the possibility of testing the feasibility of endogenous regeneration in a setting not involving transplantation. Preliminary data indicate that a daily regimen of THR-123 injections administered to alloxan-treated diabetic mice drastically reduces hyperglycemia vs. saline-treated controls. Immunofluorescence analyses of treated mice show small islet-like structures with highly increased proliferation rates, which are largely absent from saline-treated controls. Our results are consistent with the hypothesis that THR-123 stimulates the generation of new islets from progenitor-like cells ?a hypothesis that our UM/DRI associates are fully dissecting in the context of a parallel project. Regardless of the mechanism of action, the observed action of THR-123 on b-cell formation and enhanced glycemic control warrants the conduct of a project focused on the validation of this small molecule as a therapeutic lead for the induction of b-cell regeneration in animal and human tissue models. Thus, the general objective of this Phase I proposal is to confirm the suitability of THR- 123 for clinical development, with a single specific aim (Confirmation of THR-123-induced b-cell regeneration in diabetic mice and live human pancreatic slices). In short, we will conduct dose-dependence and time-course studies to confirm our preliminary observations on b-cell neogenesis in murine models in vivo as well as in cultured human pancreatic slices ?a novel analytical tool developed as a collaboration between the Diabetes Research Institute (DRI) and nPOD (Network of Pancreatic Donors with Diabetes) that allows for the real-time study of the regeneration of b-cells within their intact pancreatic niche. If successful, these studies will seamlessly transition to a Phase II proposal aimed at conducting a full preclinical ADME-Tox (adsorption, distribution, metabolism, excretion and toxicity) and pharmacokinetic (PK) profile of THR-123 with the goal of submitting an investigational new drug (IND) application to the Food and Drug Administration (FDA). The demonstration that resident progenitor-like cells within the pancreas can be activated in situ through a simple non-genetic intervention could open the door to the design of potentially transformative therapies for diabetes.